Forgivable Second Mortgages & Grants

Forgivable Second Mortgages and Grants are some of the most powerful down payment assistance tools available to homebuyers. These programs provide funding that does not need to be repaid, as long as the homeowner meets certain requirements (such as living in the home for a set number of years).

What Are Forgivable Second Mortgages & Grants?

Forgivable Second Mortgages: These are loans recorded against the property but forgiven after a certain number of years (often 5–10 years). If the borrower sells or refinances early, repayment may be required.
Grants: Outright financial assistance that never needs to be repaid.

How It Works

Eligibility: Typically based on income, purchase price, and first-time homebuyer status.
Forgiveness Terms: Assistance is gradually forgiven over time (e.g., 20% per year for 5 years).
Property Types: Primary residences only.
Funding Amounts: Ranges from $5,000 to $20,000+ depending on program.

Benefits

Reduces or eliminates down payment and closing costs.
Creates long-term affordability for buyers.
No repayment required if program terms are met.
Can often be combined with other assistance.

Fun Facts & Insider Details

Florida Example: Florida Housing offers forgivable loans that are forgiven after 5 years if the borrower stays in the home.
Kentucky Example: Louisville and Lexington provide grants through their local housing trust funds.
Stackable Programs: Buyers can often combine forgivable mortgages with MCCs or employer assistance.

Next Step

Apply Now

⚖️ Disclaimer (applies to all DPA pages): Program eligibility, assistance amounts, and forgiveness terms vary widely by state, county, city, and employer. Income limits, purchase price caps, and occupancy requirements apply. Always review program guidelines and consult with your lender for the most accurate and updated information.